The coronavirus pandemic and ensuing restrictions have sent shockwaves throughout the economy, and while the property market has proven to be remarkably resilient so far, it hasn’t been completely spared.
According to data from CoreLogic, prices have been edging downwards since Australia entered lockdown back in March, and it's been properties at the higher end of the market that have seen the steepest declines.
In Melbourne, dwellings in the highest value segment (those worth $959,500 or more) dropped by 1.3% in May, with the middle of the market falling 0.6% and the lowest value segment falling 0.3%.
In the same month, Sydney property prices in the top quartile (those worth over $1.35 million) decreased by 0.6% while the middle of the market dropped 0.4%. The lower end saw a slight increase of 0.1%.
According to CoreLogic head of research Eliza Owen, this is typical of the Sydney and Melbourne markets, as more expensive areas are prone to greater fluctuations in response to market changes.
“However, as the wider economic downturn drags on housing demand, mild price declines are likely to spread, resulting in a more broad-based downturn in the next 12 months,” she said.
Which areas have been most impacted?
|Sydney||North Sydney and Hornsby||-0.7%|
|Brisbane||Logan - Beaudesert||-0.5%|
|Sydney||Inner South West||-0.4%|
|Sydney||Baulkham Hills and Hawkesbury||-0.3%|
|Brisbane||Moreton Bay - South||-0.3%|
The data also reveals that many of the largest price falls occurred in Melbourne’s inner city suburbs. Between the end of March and the end of May, Malvern East was the worst performing capital city suburb, with property values decreasing by 4.8%.
Other Melbourne suburbs where property prices have taken a beating include Glen Iris (-3.8%), Northcote (-3.5%), Port Melbourne (-3.2%), and Brunswick East (-3.1%).
Meanwhile, the Sydney suburbs that recorded the steepest drops in property values were Mosman (-2.5%), Lane Cove North (-2.4%) Manly (-2.3%), Leichhardt (-1.7%) and Wentworth Point (-1.4%).
Is now a good time to find a bargain?
While the dip in property values across Australia has been quite modest (-0.4% in May according to CoreLogic), it’s still a welcome turn for prospective homebuyers, who might have been discouraged by the unremitting rise in prices pre-COVID.
But is now a good time to buy property? According to Mozo’s property expert Steve Jovcevski, it all depends on how secure your job is and how insulated your finances are against any further economic shocks.
“If you’re still working, have a good income, and are able to get a home loan, then you are definitely well-placed to pick up a bargain. Especially since there are fewer investors in the market at the moment,” he said.
First homebuyers will also receive further support via the First Home Loan Deposit Scheme, which resumes in July 2020. This will allow homebuyers to purchase a home without the requisite 20% deposit and begin their home ownership journey sooner.
So if you’re looking to buy and the recent dip in prices has given you a surge of confidence, browse our guide to making your property move during lockdown for tips. And if you’d like to compare home loans, head over to our home loan comparison page.
Home loan comparisons on Mozo - last updated January 16, 2021
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